Initial public offerings of Walmart’s Flipkart marketplace and PhonePe digital payments platform could take a couple of years, a Walmart executive said.
“This is something we’re looking at over the next couple of years,” Walmart’s executive vice president for corporate affairs, Dan Bartlett, said on the sidelines of the company’s shareholder meeting near its Bentonville, Arkansas, headquarters, late on Thursday.
Walmart may put an initial public offering of PhonePe ahead of Flipkart, even though Flipkart is a more mature business, Bartlett told Reuters.
Based in India, PhonePe is “one of the largest payment platforms” in the country, he said. He cited PhonePe’s tie to India’s instant money transfer system, Unified Payments Interface (UPI), which allows users to transfer money across multiple banks without disclosing account details.
“There’s a lot of a processes that have to be put in place before we go public,” Bartlett said, referring to PhonePe. “Obviously the question about the Indian exchange versus others” is “under consideration” for the future IPO listing, he added.
Walmart’s Flipkart marketplace and PhonePe payments operations in India could be $100 billion (roughly Rs. 8,35,200 crore) businesses, buoyed by strong growth, the retailer’s chief financial officer said a year ago at an investor conference.
Executives at that time cited the two businesses as key drivers that could help Walmart meet its target of doubling the gross merchandise volume it sells in foreign markets to $200 billion (roughly Rs. 16,70,300 crore) in five years.
PhonePe said in October 2023 that its consolidated revenue for the financial year 2023 surged 77 percent, as more customers used its platform to send and receive money in India’s booming digital payments market.
With more than 490 million registered users, PhonePe had a near 51 percent share of the value of transactions on India’s UPI as of March 2023.
Alphabet’s Google will pick up a minority stake worth $350 million in Walmart-backed Flipkart, valuing the Indian e-commerce firm at $37 billion, a source with direct knowledge of the matter told Reuters.
Google and Flipkart were not immediately available to confirm the value of the investment.
The tech giant will join in as an investor in the latest funding round for the Bengaluru-based company, Flipkart said in a statement.
The round will be led by Walmart, Flipkart’s biggest shareholder and will make Google a minority investor, subject to approvals.
“Google’s proposed investment and its Cloud collaboration will help Flipkart expand its business and advance the modernization of its digital infrastructure to serve customers across the country,” Flipkart said in a statement.
In December 2023, a Flipkart spokesperson confirmed that Walmart was set to infuse $600 mln in the company as part of a $1 billion round.
Flipkart has been a source of IPO speculation since Walmart took over the company, which competes with Amazon.com in India.
Earlier this month, executives at the U.S. retail giant said they are “looking and exploring” for the right time for Flipkart’s initial public offering.
Walmart-backed Indian e-commerce firm Flipkart has held discussions over potentially acquiring the on-demand delivery platform Dunzo, TechCrunch reported on Tuesday, citing three people familiar with the matter.
While talks are still ongoing, complexities surrounding Dunzo’s ownership structure have impeded the two parties from coming to an understanding over a deal, the report said.
The retail arm of Reliance Industries, which picked up a 26 percent stake in Dunzo in 2022 for $200 million, has not approved the deal yet, the report added.
Dunzo, in an emailed response to Reuters, denied having “any conversation with any player for an acquisition of the business”.
Flipkart and Walmart did not immediately respond to Reuters’ requests for comment.
Cash-strapped Dunzo, which is also backed by Alphabet’s Google, has announced restructuring, deferment of salaries and layoffs in the recent past.
Last year in April, Dunzo had secured funding of $75 million (roughly Rs. 614 crores) through convertible notes and had laid off about 30 percent of its staff as it planned a revamp of its business model.
Key backers Reliance Retail and Alphabet had added about $50 million (roughly Rs. 409 crores) of the funding, with other existing investors putting in the rest.
Under the new business model, the company was said to cut about 50 percent of its dark stores and run only those that could be profitable or were nearing that threshold.
In July 2023, Walmart paid $1.4 billion (roughly Rs. 11,520 crore) to buy out hedge fund Tiger Global’s investment in Flipkart. The transaction valued the e-commerce firm at $35 billion (roughly Rs. 2,88,010 crore).
Tainted eyedrops yanked from pharmacy shelves over fears they could cause infections and even blindness were made in a factory in India where workers walked around barefoot and safety test results were faked, according to an explosive report.
The 26 over-the-counter products — sold as store brands at retailers including CVS, Rite Aid, Walmart and Target — came from a company in Navi Mumbai called Kilitch Healthcare India Ltd., according to a Bloomberg investigation.
On Oct. 25, the Food & Drug Administration issued a recall on the more than two dozen eyedrop brands after agency investigators found unsanitary conditions at the India plant and “positive bacterial test results from environmental sampling of critical drug production areas in the facility.”
The government report, obtained by Bloomberg, said that workers were showing up to the factory barefoot or were not wearing protective gear in sterile areas while one person was observed combing their hair amidst cleaning equipment and others were forging the dates on products attesting to their sterility.
This factory in Mumbai India allegedly has ‘insanitary’ conditions that has led to contaminated eyedrops, according to an FDA inspection report seen by Bloomberg.via Pharma Technology
The FDA did not immediately respond for comment but a spokesman told Bloomberg, “The agency proactively worked with retailers to have these products removed from the market before any known injuries arose,” Jeremy Kahn said in an email. “We urge consumers to stop using these products, as it could result in an eye infection.”
It’s the second time US authorities found problems with eyedrops made in India.
In February, health agents found that another eyedrop maker in India was linked to infections and to four deaths and 18 cases of vison loss in the US.
There has been an “alarming” rise in the number of eyedrops sold in the US that may cause health problems, according to the Dry Eye Foundation.Jeffrey Greenberg/Universal Images Group via Getty Images
In that outbreak involving eyedrops from EzriCare LLC and Delsam Pharma LLC – that were recalled – a dangerous bacteria was found in the products, according to another investigation by Bloomberg.
Four people had their eyeballs removed to stop the spread of the bacteria while others experienced cloudy abscesses on their corneas, discharges from their eyes and migraines that lasted for months.
The contaminated eyedrops made their way to the US because of a lapse in the FDA’s supervision of over-the-counter medicines that allowed “two inexperienced entrepreneurs” in India to sell their products to distributors and pharmacists in the US, according to the report.
The FDA issued a warning in October about 26 brands of eyedrops that could cause infections or even blindness, including the Velocity brand.Velocity Pharma
India bills itself as the “pharmacy to the world” because it is home to most of the pharmaceutical manufacturing.
However, the FDA has little power to force a drugmaker to recall its products.
But it did ban the Kilitch factory on Oct. 23 from sending more eyedrops to the US after inspecting the plant for a week, according to Bloomberg.
The agency also asked Kilitch to recall its products but it hasn’t so far, according to the outlet.
Many eyedrops are manufactured in India, which bills itself as the “pharmacy of the world.”UCG/Universal Images Group via Getty Images
The FDA has warned consumers about 78 over-the-counter eyedrops this year, but only 13 have been recalled, according to the Dry Eye Foundation, a non-profit in Seattle.
The group raised a warning flag back in April when it alerted the public about a “sharp rise in eye drops marketed in the US that may pose health risks to consumers.”
In August, the FDA issued a warning about a “life-threatening infection” associated with Dr. Berne’s Organic Castor Oil Eye Drops; and Dr. Berne’s MSM Mist 15% Solution.
The FDA said the contaminated eyedrops could lead to “minor to serious” infections that could potentially affect vision and even “progress to a life-threatening infection.”
Indian e-commerce startup Meesho has posted its first-ever profit and is targeting a stock market listing in the next 12-18 months, a senior company executive said in an interview.
Meesho competes with Amazon and Walmart‘s Flipkart in India’s fast-growing e-commerce market, with its website becoming popular by targeting smaller towns and cities with unbranded products like clothes and cosmetics. It was last valued at nearly $7 billion (nearly Rs. 57,930 crore), PitchBook data shows.
After posting losses since inception in 2015, Meesho, which is backed by Japan’s SoftBank, recorded profits for the first time last month, it said in a statement.
Its revenue between January-June was more than $400 million (nearly Rs. 3,300 crore), and Meesho expects it to cross $800 million (nearly Rs. 6,620 crore) by the year end, Chief Financial officer Dhiresh Bansal told Reuters on Friday.
“Since we just turned from negative to positive, it’s a small nominal kind of number, single digit of course… We intend to continue the profitability trajectory,” he said without sharing specifics.
An initial public offering (IPO) is now being planned in the next 12-18 months, Bansal added.
“We feel that the growth, scale and profitability are there (for an IPO), but you also want to make sure that there is enough of a track record for market investors to look at.”
Meesho, which was founded by Indian Institute of Technology graduates Vidit Aatrey and Sanjeev Barnwal, clocked more than 1 billion orders in the last 12 months.
Meesho’s first profit comes at a time when Indian startups have been struggling to raise funds due to a funding squeezeworsened by higher interest rates and a global tech market rout. Many Indian startups have fired thousands of employees and cut costs aggressively in recent months.
Last week, Indian food delivery giant Zomato also posted its first-ever profit.
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China’s Xiaomi will focus on boosting its India sales from retail outlets after years of big bets on e-commerce, its India president said, as the company seeks to revive smartphone sales after falling behind South Korea’s Samsung.
E-commerce sales in India via Amazon and Walmart‘s Flipkart have surged in recent years, helping Xiaomi and others expand in one of the world’s fastest-growing markets, with 600 million smartphone users.
But while 44 percent of India’s smartphones sales are now online, the brick-and-mortar segment remains the bigger play and Xiaomi expects it to grow further.
“Our market position in offline is substantially lower than what it is online,” Xiaomi’s India head, Muralikrishnan B, said in an interview on Friday. “Offline is where you have other competitors who have been executing fairly well and have a larger market share.”
Just 34 percent of Xiaomi’s India unit sales this year have come from retail stores, with the rest through websites that have long been its dominant sales generator, data from Hong Kong-based Counterpoint Research shows. Samsung, in contrast, gets 57 percent of its sales from stores.
Xiaomi plans to expand its store network beyond the current 18,000 and increasingly partner with phone vendors to offer other products, such as Xiaomi TVs or security cameras, where Muralikrishnan said competition is less intense.
He said Xiaomi found some partner stores that put its bright orange branding outside shops were displaying rival brands more prominently inside, a marketing issue the company would address.
Xiaomi’s offline push comes months after it lost its leadership position to Samsung, which had a much bigger portfolio of premium phones now in vogue. The South Korean giant has a 20 percent market share in India, while Xiaomi, which historically focussed on budget phones, has 16 percent.
“Offline remains a key platform as India embraces the premiumisation trend,” said Counterpoint analyst Tarun Pathak. “Consumers spending more would like to have the look and feel of the premium product.”
Xiaomi plans to hire more store promoters — salespeople who lure, pitch and sell phones to prospective buyers inside outlets. It targets tripling the count to 12,000 promoters by the end of next year from early 2023 levels, Muralikrishnan said.
Another significant India challenge for Xiaomi is a federal agency’s $673 million (nearly Rs. 5,500 crore) freeze on its bank assets since last year. The agency alleges Xiaomi made illegal remittances to foreign entities in the name of royalties. The company denies wrongdoing.
“We’ll continue to be confident… that ultimately our position will be heard and validated,” Muralikrishnan said.
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The Indian government’s open e-commerce network ONDC has expanded its operations into 236 cities in the country while adding more than 36,000 merchants, a senior company official said on Thursday.
The government launched the Open Network for Digital Commerce (ONDC) last year to give small businesses and retailers access to processes and technologies usually provided by big e-commerce platforms such as Amazon and Walmart.
The non-profit company’s network currently displays products and services from all participating e-commerce platforms in search results across all apps on its network.
“ONDC is handholding small merchants while aiming to make e-commerce more inclusive and accessible for consumers,” T Koshy, CEO of the company, told reporters.
The network is slowly and steadily recording an uptick in transactions, he said.
The government has said existing platforms are tightly controlled, keeping out many small players. It expects ONDC to increase competition and foster start-up innovation.
T Koshy said the company was in talks with cab operators to launch operations in at least four cities, after successfully launching mobility operations in two cities in South India.
More than 55,000 taxi cab owners have already joined the network, and consumers were using it for about 35,000 rides a day, he said.
The platform has helped cab owners to provide services while saving on hefty commissions paid to other platforms and offer lower rates to passengers, said Shaikh Salauddin, head of Telengana Four Wheeler Drivers Association, and a taxi driver.
“The ONDC move has helped to promote fair competition in the e-commerce and helping consumers and small players.”
ONDC aims to raise e-commerce penetration in the next two years to 25 percent of India’s consumer purchases, from nearly 8 percent now, in a country of 1.4 billion people.
On Tuesday, the government said the state-run Indian postal service, which has a network of nearly 160,000 post offices, will also join the ONDC network to provide logistics services to small traders across the country.
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Commerce and Industry Minister Piyush Goyal on Tuesday invited all big and small retailers to join the government-promoted Open Network for Digital Commerce (ONDC), as it would help in creating huge opportunities for everybody.
ONDC aims to promote an open platform for all aspects of e-commerce retail. It would help small retailers expand their business through e-commerce medium and reduce the dominance of giants in the sector.
It is a non-profit company, which is formulating a set of standards for voluntary adoption by sellers or logistics providers or payments gateway operators.
ONDC will require an undertaking from each participant at the time of onboarding that it will comply with the policy in its entirety.
“The Walmarts and Flipkarts of the world the Tatas, and Reliances of the world, everybody has a role in making ONDC a success. So, we would like to invite everybody to be part of this journey in a free and fair manner and nobody will be discriminated against. It is open to all. ONDC is open for business,” Goyal said here at a function.
The industry ministry and the consumer affairs ministry are working together to ensure that the grievances of consumers are addressed.
“We are making sure that this platform remains absolutely agnostic to any influence,” Goyal said, adding the platform would allow the e-commerce sector to flourish without damaging a large section of stakeholders and small retailers.
It would allow small retailers to participate in this journey of new technologies and new ways of doing business.
“ONDC threatens nobody. Even big e-commerce is not threatened. It only unlocks and opens the doors of opportunity,” he added.
The platform, he said, is using a system of creating an inter-operable network, allowing different platforms to collaborate and create an interface to help the buyers and sellers.
“ONDC will be the transformational e-commerce platform not just in India but across the world, in the years to come,” he said.
On the public procurement portal GeM, he said, it has saved Rs. 40,000 crore taxpayers’ money.
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Walmart-owned Indian payments firm PhonePe on Wednesday said it had raised an additional $100 million (roughly Rs. 820 crores) from General Atlantic and other investors as part of its ongoing $1 billion (roughly Rs. 82,063 crores) fundraising to expand into the lucrative lending space.
With the latest round, PhonePe, India’s most valuable payments firm with an estimated value of $12 billion (roughly Rs. 9,84,744 crores) has raised $650 million (roughly Rs. 533 crores) across four tranches from its backers, including Tiger Global.
General Atlantic had invested $350 (roughly Rs. 287 crores) million in the fintech during the same funding round in January.
At over 46 percent, PhonePe in March had the largest market share among applications running the unified payments interface (UPI) digital payments system, per data from the National Payments Corporation of India.
Recently, the digital payments firm PhonePe launched an app called Pincode on the Indian government’s open network to strengthen its e-commerce business.
The Open Network for Digital Commerce (ONDC) was launched last year to enable small merchants and local stores across India to access processes and technologies typically deployed by large e-commerce platforms like Amazon and Walmart.
Pincode, which will focus on hyperlocal commerce, is currently live only in Bengaluru and available on the Google Play Store and the App Store, PhonePe said in a statement. It said categories on the app will include groceries, food, pharma, electronics, home decor, and fashion.
The company is targeting 100,000 orders a day on the app by December, Chief Executive Sameer Nigam said, adding that it would not launch the service in more than 10 cities in the first year.
PhonePe already has an e-commerce platform, called Switch, on its app, which offers services including food delivery, grocery shopping, travel, hotel booking, retail fashion, and healthcare.
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Indian digital payments firm PhonePe said on Friday it has raised $200 million (nearly Rs. 1,650 crore) from majority backer Walmart at a pre-money valuation of $12 billion (nearly Rs. 99,000 crore).
PhonePe, already India’s most valuable payments firm and among the country’s most highly-valued startups, said the investment is part of its ongoing fundraise of up to $1 billion (nearly Rs. 8,250 crore).
It has raised $350 million (nearly Rs. 2,900 crore) from private equity firm General Atlantic and $100 million (nearly Rs. 820 crore) from Ribbit Capital, Tiger Global and TVS Capital Funds in the past two months, at the same $12 billion valuation.
American retail behemoth Walmart, which acquired a majority share in PhonePe in 2018, will continue as a majority investor, the Indian company said, without disclosing its stake.
Despite a funding winter, the Indian digital payments space has been a bright spot due to the popularity of online payments and startups’ ambitions to branch into the lucrative financial services space.
PhonePe said it plans to deploy these funds to build and scale new businesses including insurance, wealth management and lending.
PhonePe separated from Indian e-commerce giant Flipkart late last year, when it also shifted its registered headquarters from Singapore to India, with Walmart picking up the nearly $1 billion tax bill for the move.
The relocation, according to some reports, was to ensure an easier entry into the country’s highly-regulated financial services industry, especially lending.
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